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Launch of the 2016 Position Papers

On 3 November 2015, the ECCT's 2016 Position Papers were officially released at a Premium Event lunch. A copy of the annual publication was officially handed over by ECCT Chairman Bernd Barkey to the Taiwan government, by represented by Dr Duh Tyzz-Jiun, Minister of the National Development Council. The event was also attended by around 90 guests, including board directors, committee chairpersons, European trade office representatives and other ECCT members. A summary of the main theme and overview were presented at the event by Chairman Barkey. Following the lunch, the papers were released to the media at a press conference, which was attended by around 20 journalists from print, television and online media groups

The theme of this year's papers is "Decision Time: Taking Courageous Action in Uncertain Times". The papers include separate submissions from 23 of the ECCT's 29 industry and support committees and raise 130 issues, 76 that were unresolved from previous years and 54 new issues.

In his introductory remarks at the launch, ECCT Chairman Bernd Barkey noted that the World Bank's recently-released 2016 Doing Business Survey ranked Taiwan in 11th place, up eight places from the previous year. He congratulated the government on this performance, saying that it showed that authorities had been working hard to make Taiwan more competitive. He also acknowledged that the government has worked diligently on issues important to ECCT members. Of the 122 issues raised in last year's papers, five were completely resolved, 14 were mostly resolved and six were partially resolved, a level of progress similar to that of the past three years.

Position Paper Overview
The overview of the papers outlines some of the major challenges that Taiwan is facing, many that are shared with international counterparts and some that are unique to Taiwan. The immediate challenge is dealing with economic headwinds as a result of the global economic slowdown. At the same time, Taiwan is facing very difficult medium and long-term challenges related to demographic changes, globalisation, energy security, healthcare, the environment, infrastructure development and securing talent. The overview makes the point that leading Taiwan through uncertain economic times and dealing with the multiple and complex challenges will require creative thinking, some tough decisions and courageous action on the part of the government.

Economic uncertainty in face of a global economic slowdown presents Taiwan's most pressing and immediate challenge. While the government has no control over global economic conditions, there are many ways it could act to improve the economic and regulatory environment that would put Taiwan in a better position to face challenging global conditions. In particular, an attractive regulatory environment would lead to a virtuous cycle of rising investment, trade, growth and the creation of good jobs.

Internationalisation in response to globalization
The overview recommends that authorities always bear in mind that Taiwan is part of the global village and must adapt to the challenges of globalisation by embracing international trends, standards and the best practices. The papers list many examples where Taiwan has not yet adopted or harmonised local standards with the best international standards and practices, including automobile emissions and parts, financial services, cosmetics and customs and logistics procedures. In addition, the papers urge authorities to recognise internationally-accepted test reports, eliminate the need for double-testing and other technical barriers to trade.

The papers also call for fair and reasonable regulatory procedures, pointing out that in Taiwan there are too many instances of important policy changes that are not fully communicated to the industry. In addition, the period and number of opportunities provided for public feedback and consultations is often too short. Before issuing regulations, rulings or policies, authorities are urged to make the information fully transparent and give the industry sufficient time to study draft proposals and provide feedback. After announcing any regulatory changes, authorities should allow sufficient time for the industry to adjust their current procedures, operations or systems in order to be in full compliance with new legal requirements.

Dealing with demographic challenges
Taiwan's rapidly-shifting demographics will pose increasingly-difficult challenges to authorities in the years ahead in terms of labour, pensions, healthcare and other social spending costs. Dealing with these challenges is not possible without a dynamic economy and good job opportunities, which are lacking at the moment. The papers caution against allowing social spending to overwhelm "spending for the future" and therefore urge the government to continue investing in education and research and to upgrade Taiwan's infrastructure, which are vital to ensure Taiwan's future economic prosperity.

Energy security
Energy security is another tough challenge. Taiwan's electricity reserve ratio fell below 5% in the summer of 2015, raising concerns of future electricity supplies for business leaders. The papers point out that there are too many government agencies with overlapping responsibilities, insufficient or poorly-considered policies and uncoordinated procedures that are holding back the modernisation of Taiwan's energy sector. Moreover, Taiwan has committed to cutting its greenhouse gas emissions to 50% of 2005 levels by 2050. Taiwan's current energy mix relies on fossil-fuel based sources (oil, coal and natural gas) for about 90% of the mix. To reduce carbon emissions, this mix will need to be transformed to cleaner alternatives. The papers recommend the following action: A comprehensive long-term master plan for energy security, a streamlining of government agencies with overlapping responsibilities, a final decision about nuclear energy, electricity liberalization, an increase in energy efficiency and an aggressive expansion of renewable energy capacity.

Healthcare system sustainability
Taiwan's healthcare system is facing significant challenges that need to be addressed to ensure the future quality and sustainability of the system. At present, there is too much focus on budgetary concerns and not enough focus on quality and healthcare outcomes, which is putting pressure on healthcare facilities and personnel. The pricing system for medicines is unfair and the approval process for new medicines remains long, unpredictable and opaque, all which slow down or restrict accessibility for patients. There is also an overuse of hospital facilities and an under-use of community clinics and a shortage of nurses and doctors in key areas. To address these issues, the papers recommend establishing a fair pricing system for medicines, reform of the drug review and reimbursement process, an increase in compensation and a reduction in the workloads of nurses and doctors and creative ways to rebalance the patient flow from hospitals to community clinics.

Maintaining and developing talent
Taiwan's changing demographics will pose new challenges to secure labour and talented people with the appropriate skills and qualifications. According to the World Economic Forum, Taiwan has the lower rankings in the capacity to attract talent category than Hong Kong, China, Singapore, Malaysia, South Korea and Thailand. In addition, while authorities have made gradual improvements in regulations governing the hiring of foreign nationals, some unreasonable restrictions are preventing companies from hiring the people they need. There are also instances where Taiwan does not provide equal treatment to foreign residents. The papers recommend that authorities review labour policies in those countries with higher rankings than Taiwan and adopt the best practices in Taiwan to ensure Taiwan has sufficient qualified labour to sustain growth and competitiveness. To help firms to attract and retain talent, authorities are urged to make Alien Resident Certificate numbers compatible with national IDs, allow foreign nationals to join the national pension system and maintain permanent resident status as long as permanent resident card holders return to Taiwan at least once every five years. To support industrial development, the papers recommend that authorities increase investments in basic scientific research and the research and development budgets of higher academic and research institutions.

Infrastructure and tourism development
While the rapid rise in tourism over the past 10 years has been widely welcomed, there is a general consensus on the part of government agencies and industry players that Taiwan's capacity for tourists in terms of numbers should be limited and that the focus of future tourism development should be on quality rather than quantity. This will require investments in infrastructure and skills. However, infrastructure is still not keeping up with the large increase in tourists. To address this, the papers recommend that authorities speed up renovations of existing terminals at Taiwan Taoyuan International Airport and expedite the construction of TTIA's Terminal 3 and the third runway. Another area of potential for tourism is cruise and leisure boating. In order to further develop Taiwan as a preferred destination for regional and global cruise providers, the papers recommend building a multi-functional cruise terminal in Keelung and introducing a 72-hour landing visa for transit travellers to Taiwan.

The papers conclude that Taiwan remains a dynamic player in the global economy, has good transport and communications infrastructure, a relatively consistent legal system, a stable government, a highly skilled and stable workforce, reputable academic and research institutions and a functioning universal healthcare system. Compared to some of its regional competitors, the quality of life in Taiwan is also good in terms of air quality, public transport and a wide variety of entertainment and leisure activities. While the challenges facing Taiwan are complex and varied, they are not insurmountable if the government continues along the path of internationalisation and takes bold and decisive action to address them. The papers highlight the fact that members of the ECCT have been consistently supportive of Taiwan's progress and champions of Taiwan's numerous strengths. Collectively Europeans remain the largest group of foreign investors in Taiwan and ECCT members have demonstrated their commitment to Taiwan through years of building their local operations, generating economic growth and jobs in line with the highest international standards for corporate governance and sustainability. Finally, the case is made that the recommendations in the 2016 position papers, if adopted, would make a positive contribution to the development of the economy, help the government to address many long-term challenges and ultimately lead to a bright and prosperous future.

NDC's response
In his remarks upon receiving the papers, NDC Minister Duh Tyzz-Jiun, thanked the ECCT for its contribution to Taiwan's economic development and valuable suggestions, which are helpful to the government in its efforts to improve the regulatory environment. Minister Duh reported that the government has conducted an analysis and comparison of recommendations made by both Taiwanese and foreign business chambers as a reference for reform in line with the best international standards and practices. Besides progress made on issues mentioned by Chairman Barkey in his presentation, Minister Duh highlighted some examples of recent progress. For instance, The NDC has issued an official notice to all government departments stating that they should treat Alien Residence Certificates (ARC) as equivalent to Republic of China (ROC) identity cards for identification purposes. The letter states that ARC holders do not need to present their passports for identification purposes. This follows an official ruling published earlier this year by the Financial Supervisory Commission (FSC) that recognizes ARCs as equivalent to ROC IDs for the purposes of opening a bank account in Taiwan. Making the ruling applicable to all government agencies will help to make routine business transactions more convenient for foreign residents in Taiwan. In addition, the minister said that, in order to improve the transparency of its process when introducing new regulations, authorities have proposed extending the public consultation period to provide comments on draft regulations from the current seven to 14 days in order to give interested parties more time to provide feedback.